What Can Traditional Sports and Esports Learn from One Another?

By Jason Parker

November 13, 2019

0 Comments

traditional sports investing esports

In an article by The Esports Observer, traditional sports franchises are starting to see the serious benefits of cross-promoting and investing in esports. There are certainly lessons to be learned on both sides of the field.

Esports might sound like a relatively new thing, but esports has been a reality since the 1970s. The earliest known video game competition took place on October 19, 1972 at Stanford University for the game Spacewar.

The prize may have just been a subscription to Rolling Stone magazine, but it was the beginning. Esports is still new compared to the NHL, NBA, and NFL. Franchised traditional sports are over a 100 years old though.

Cross-Pollination

More than ever traditional sports outlets are picking up esports teams. Peter Gober (Golden State Warriors) co-owns Team Liquid. The Washington Capitals are entering esports as well with their upcoming NHL league.

Then there’s Comcast Spectator, who owns the Philadelphia Flyers and the Philadelphia Fusion (OWL). One thing that Comcast is doing that could be interesting is a dual-ticket option for the Flyers and Fusion which could lead to people attending events for both teams.

If the price is right, people that aren’t necessarily Flyers fans could become fans! Though I don’t attend a lot of sporting events, there’s something addictive about the energy you find at a hockey game. Other outlets could learn a lot from this decision. The Dual-Ticket isn’t available yet. It’s still in the works.

The move could be a major one. Some people say esports is a kid’s thing, that once you’re an adult, you stop paying attention to video games. Let’s go back to the cross-pollination idea. Father and son go together to a Flyers game, and then on the weekend, they head back to watch the Fusion do battle in Overwatch. Family time, plus intense sporting action? That’s a win-win.

Sure, Comcast Spectator doesn’t care about families coming together, unless they spend money. These megacorps don’t care about us. They want to make money, and that’s fine. But, if these two audiences can come together and appreciate the other’s style of sport, they can make serious cash.

Not Everyone Agrees on the Profitability of Esports

I’m sure we’ve all heard by now that the Dallas Mavericks owner Mark Cuban doesn’t feel like esports are worth it. I can’t say I agree with him. The problem for me is monetization.

Esports organizations need to figure out proper monetization and use of talent, without having them burn out. It’s all about connections, and the Traditional sports outlets already have these. Traditional sports teams that own esports organizations can use those contacts to make serious money deals and sponsorships for their esports stars.

On the topic of money, I do want to point out one thing that could be harming esports in general. Franchising, while a great way to have stability for teams and esports, has a downside. When is the buy-in for an unproven commodity $25 million? That’s outrageous.

There’s my main issue with esports becoming profitable. You as a team, must invest such a massive amount of money to secure a spot in an esports league. That’s a pretty big financial hole to dig out of and expect your team to make good on.

Not too long ago, our own Isaac wrote a piece on CDL spots not being worth it. Using data in the OWL, it would take 12.5 seasons to make money back invested. That, of course, doesn’t account for other fees, salaries, and other monetary investments made.

It’s Early, But Promising

What else can traditional sports learn from esports? Well, esports is a global affair. Teams from all over the world come together to prove they are the greatest. Traditional American sports tend not to stray from the 50 states, with the occasional dip into Canada and the United Kingdom.

In the Esports Observer piece, Dave Scott, chairman and CEO of Comcast Spectacor, pointed out that this shift into a younger esports audience has caused them to consider globalization. Scott pointed out that the Philadelphia Flyers opened the season in Prague for the NHL’s Global Series.

Scott also said that “as recently as five years ago, the concept of trading a home game for an opportunity to build and strengthen our fan base in Europe may not have worked.” Nothing risked, nothing gained could be the lesson learned.

No traditional sports brand investing in esports is going to see a pay off overnight. It’s going to take years for it to take off. So far, it seems like these team owners are happy with their investments, and so am I. A larger reach for esports means more fans can take part in all the excitement. I like the idea of esports not being confined to Twitch and Mixer. There’s also theaters and stadiums with so many possibilities for the future.

0 Comments

Leave a Comment